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Shaun Slayton's drive to work in Scranton might get a bit more expensive.

The Clarks Summit resident is one of the thousands of commuters who live outside the city but work in it and who would have to pay a new wage tax that the city administration and council are planning to impose.

Reviving such a commuter tax is a key plank of a revised recovery plan being crafted by the administration and council under Act 47, the state's financially distressed municipality law. A 1 percent commuter tax would generate about $3 million to $4 million a year, and they hope to have it in place by Jan. 1. Under a 1 percent tax, a person earning $30,000 a year would pay $300.

Mr. Slayton, who works as a service adviser at Tom Hesser Nissan on Lackawanna Avenue, was not aware of the possible commuter tax but said he would not relish the hit to his wallet.

However, he and other commuters may have no choice. Mayor Chris Doherty and city council agree a commuter tax is necessary to raise badly needed revenue for the financially strapped city, but they differ on the roads to take to get there.

Council favors change

Most council members want to change the city's classification, from Class 2A to Class 3, because they believe that will make it easier to impose a commuter tax. While the mayor initially supported that approach, he now says changing classification is unnecessary because the city can create a commuter tax under its current classification. Furthermore, under either classification, the city still would need to seek approval yearly for a commuter tax from Lackawanna County Court.

"You don't have to change the classification of the city. You can go to court" for commuter-tax approval, Mr. Doherty said.

Minority Councilman Bob McGoff also said, "As a 2A city we can implement a commuter tax," and that a classification change should be put before city voters.

The idea of a commuter tax dates to at least December 1971, when resident Francis McGeever suggested to council that it impose a $7 a week commuter tax, according to Times-Tribune archives. In 1974, city council President James Doherty, father of the current mayor, floated the idea for a commuter tax.

"The people who live in the city have to be helped by those who work here but don't live here," James Doherty was quoted in a July 1974 newspaper story. That's essentially the same argument raised today by council President Janet Evans.

In 1975, James Doherty proposed a 3 percent wage tax on all workers, both residents and out-of-towners, but it was rejected by his fellow council members. Mayors then began to take up the commuter-tax banner. Shortly after being elected mayor in 1977, Eugene Hickey pursued a commuter tax, but state legislators would not back it. In 1980, Mr. Hickey proposed a 1 percent commuter tax, but Councilman Neil Trama contended it was illegal and would require state legislation to allow it.

Many of the county's other municipalities strongly opposed a commuter tax, calling it "taxation without representation."

In 1986, Mayor David Wenzel tried to revive the idea, but it went nowhere. As the city's financial condition worsened, a commuter tax began to gain traction in 1990 and 1991, when Mayor Jim Connors and council endorsed the idea. However, neighboring municipalities again strongly opposed it.

After Scranton was designated in 1992 by the state as distressed under Act 47, the city in 1993-94 imposed a 0.6 percent commuter tax that raised $2 million a year for the city, but was much-hated by many who paid it and opponents fought it in court. The tax was upheld in court but discontinued after its two-year run.

In 1996, then-state Rep. Frank Serafini of Moosic, whose district ran from Moosic to Vandling but did not include Scranton, sponsored legislation that raised the bar for Scranton to impose a commuter tax. This Serafini law requires the city to demonstrate it has substantially implemented a recovery plan, including increasing taxes and fees on its own residents; has taken action to obtain approval to implement those changes from other required parties, such as the courts, voters and municipal unions; and shows the revenue generated by those efforts is insufficient to balance the city's budget.

Because the Serafini law applies only to a Class 2A city, and Scranton is the only one in the state, the council now wants to change the city's classification to Class 3, to avoid the Serafini hurdles.

The city could qualify as third class because its population dipped below 80,000 in two consecutive censuses, 2000 and 2010. The council has asked Gov. Tom Corbett to certify the census results to allow for the classification change.

"Their request is under legal review," said Kelli Roberts, a spokeswoman for the governor. "We're looking at the law, looking at what sort of steps it dictates. It's actually an 1895 statute that governs" classifications.

"Part of our review is determining what that appropriate process is, because it's not clearly written out in the law given how dated the statute is," Ms. Roberts said. "What we think will happen is the (state) DCED (Department of Community and Economic Development) would summarize the census findings and submit that to the governor, and he would just have to sign off on it."

However, even if census results are certified, the path forward for changing classification is unclear due to Scranton's unique 2A status, said state Sen. John Blake, D-22, Archbald.

It's unknown if a gubernatorial census certification means the classification is automatically changed or whether legislation would be needed, Mr. Blake said. A body of law developed over the years deals exclusively with Scranton's 2A status, either including or excluding Scranton from myriad issues, and an open question remains whether all those laws, such as one creating the city's Single Tax Office, would become moot or no longer valid, Mr. Blake said. As a result, a new law might be required to protect that body of 2A law and avoid possible "unintended consequences" of a classification change, he said.

"There are extensive circumstances that need to be reviewed before they go down this road" to third-class status, Mr. Blake said. "I just think it's worthy of a more deliberative review as to what consequences there would be if they change classification."

Mrs. Evans took issue with Mr. Blake's stance and questioned whether he was favoring the rest of the county over the city. For example, some 2A laws, such as the 1996 Serafini amendment, penalize the city in favor of the county, she said. Another law allows a county with a 2A city, and Lackawanna County is the only one in the state, to levy a hotel tax up to 4 percent. A pending bill would increase the hotel tax to 7 percent, "as long as Scranton remains a 2A city, and Scranton cannot levy a hotel tax since the county does so," Mrs. Evans said. "Is the county's hotel tax increase more essential in Mr. Blake's judgment than the city's proposed commuter tax?"

"Scranton should not be expected or advised to sacrifice itself to benefit the county," Mrs. Evans said. "Failure to support our city in this crucial crossroad may ultimately lead to financial defaults, a sharp decline in services and a mass exodus of residents and businesses. Rather, it is Lackawanna County that should help the beleaguered city of Scranton and its people, as should our elected state senator, John Blake."

Mr. Blake replied, "I'm not picking sides. I'm just advocating for a more deliberative process."

Scranton resident Andy Sbaraglia told the council at its meeting Thursday that the city should forget a commuter tax.

"To go out and ask somebody that lives in Dickson City or anywhere else to help pay for our incompetence, that's ridiculous," Mr. Sbaraglia said. "We deserve what we get. There's no question about it. We voted for these people. But don't ask the people of Dickson City, Taylor or Dunmore to join in our fiasco. We did it. No one else."

Contact the writer: jlockwood@timesshamrock.com

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